SHIKIAR ASSET MANAGEMENT INC

ITEM 1 COVER PAGE SHIKIAR ASSET MANAGEMENT, INC. (“SHIKIAR”) 1350 Avenue of the Americas – Ste. 1608 New York, NY 10019 Phone Number -- 212/888-6565 Fax Number -- 212/888-6596 WEBSITE – WWW.SHIKIAR.COM Firm Brochure Part 2A of Form ADV This brochure provides information about the qualification and business practices of Shikiar Asset Management, Inc. (“Shikiar”). If you have any questions about the contents of this brochure, or would like a copy, please contact us at 212/888-6565, or by email to Diane McDermott at diane@shikiar.com. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission, or by any state securities authority. Additional information about Shikiar Asset Management, Inc. is available on the SEC’s website at www.adviserinfo.sec.gov. DECEMBER 2024 1 | P a g e Shikiar Asset Management Inc.  ITEM 2 MATERIAL CHANGES On July 28, 2010, the United States Securities and Exchange Commission published “Amendments to Form ADV” which amends the disclosure document that we provide to clients as required by SEC Rules. These amendments to Part 2 of Form ADV became effective in October 2010. This Brochure dated December 2024 complies with the SEC’s requirements and rules. No material change has taken place since its last ADV dated December 2023. This Item will discuss only specific material changes that are made to the Brochure and provide clients with a summary of such changes. We will also reference the date of our last annual update of our brochure. In the past, we have offered or delivered information about our qualifications and business practices to clients on at least an annual basis. Pursuant to new SEC Rules, we will ensure that you receive a summary of any material changes to this and subsequent Brochures within 120 days of the close of our business fiscal year. We may further provide other ongoing disclosure information about material changes as necessary. We will further provide you with a new Brochure as necessary based on changes or new information, at any time, without charge. 2 | P a g e Shikiar Asset Management Inc.  ITEM 3 TABLE OF CONTENTS • Item 1 – Cover Page………………………………………………………... 1 • Item 2 – Material Changes………………………………………………… 2 • Item 3 – Table of Contents………………………………………………... 3 • Item 4 - Advisory Business………………………………………………... 4 • Item 5 - Fees and Compensation…………………………………………... 5 • Item 6 - Performance-Based Fees & Side-by-Side Management………...... 7 • Item 7 - Types of Clients…………………………………………………... 8 • Item 8 - Methods of Analysis, Investment Strategies and Risk of Loss….... 9 • Item 9 - Disciplinary Information………………………………………...... 10 • Item 10 - Other Financial Industry Activities and Affiliations…………...... 11 • Item 11 - Code of Ethics, Participation or Interest in Client Transactions • and Personal Trading…………………………….………....12 • Item 12 – Best Execution/Brokerage and Soft Dollar Practices……………14 • Item 13 - Review of Accounts……………………………………………... 17 • Item 14 - Client Referrals and Other Compensation……………………......18 • Item 15- Custody…………………………………………………….……...19 • Item 16 - Investment Discretion…………………………………………….21 • Item 17 - Voting Client Securities………………………………………......22 • • Item 18 - Financial Information……………………………………………..23 Item 19 – CyberSecurity …………………………………………………….24 3 | P a g e Shikiar Asset Management Inc.  ITEM 4 ADVISORY BUSINESS Shikiar Asset Management Inc. (“Shikiar”) is an independent registered investment advisor, based in New York City. The firm was founded by Stuart Shikiar in 1995 and is based upon the investment philosophy and process he has developed and refined over four decades of investment experience. Mr. Stuart Shikiar serves as Co-Chief Executive Officer and Chief Investment Officer. Mr. Samuel Shikiar serves as Co-Chief Executive Officer. The firm is majority owned by Stuart Shikiar, and has been in business under its present name and current ownership structure since inception. Shikiar has six employees: four investment professionals, one compliance professional, and one full-time administrative staff member. The four investment professionals have an average of over 25 years experience, and the compliance and administrative staff’s average experience is over 20 years. Our clients include high net worth individuals and families, corporations, investment companies, trusts, foundations, as well as tax-exempt portfolios, including IRA’s, 401K’s, and pension plans. Our client portfolios consist primarily of individual stocks and bonds. As of December 31, 2024 Shikiar had approximately $526,000,000 in discretionary assets under management and approximately $6,000,000 in non-discretionary assets under management, as well as approximately $41,000,000 in assets under advisement, for a total of $573,000,000 under management and/or advisement. 4 | P a g e Shikiar Asset Management Inc.  ITEM 5 FEES AND COMPENSATION Shikiar Asset Management, Inc. manages discretionary investment advisory accounts of individual and institutional clients for a management fee based on a percentage of assets in the client's account, as set forth below: 1.25% on the first $5 million in market value 1.00% on the next $5 million in market value The annual management fee shall be prorated, if applicable, and paid quarterly, in arrears, based on the value of the assets on the last business day of the prior quarter. Fees on balances above or below the amounts set forth above are determined on a case-by-case basis in accordance with the Firm’s fee schedule. Under certain circumstances, the management fee is negotiable. Billing of the management fee is done at the beginning of each calendar quarter for the prior quarter in which the client had securities and cash under the Firm's management. Clients may elect to be billed directly for fees or to authorize Shikiar Asset Management to directly debit fees from client accounts. Management fees shall be prorated for each capital contribution and withdrawal made during the applicable calendar quarter (with the exception of de minimis contributions and withdrawals). Accounts initiated or terminated during a calendar quarter will be charged a prorated fee at time of termination. Investment advisory contracts are terminated upon, or shortly following, receipt by either party of written notice of termination. In the event of such termination, the management fee will be determined on a pro rata basis for the portion of the calendar quarter for which the Firm has provided services. The market value of securities in the Account shall be valued at their last reported prices as of the beginning of each quarter on the largest securities exchange or over-the-counter market, as applicable, on which such market securities shall have traded on such date (or, in the event that the date of determination is not a date upon which such market was open for trading, on the last prior date on which such market was so open not more than ten (10) days prior to the date of determination), or if, in the reasonable discretion of the Firm, such valuation is inappropriate or does not represent fair market value, such securities shall be valued in good faith by the Firm. All other assets of the Account shall be valued at their fair market value in an appropriate manner determined by the Firm. Shikiar Asset Management, Inc. does not charge its clients any other fees or expenses other than those outlined above. However, the Client shall be responsible for expenses relating to the Account, including, but not limited to, brokerage commissions, custodial fees, if any, interest on debit balances, taxes, fees and disbursements of Client’s accountants and legal counsel, and extraordinary expenses. Further, when applicable and in accordance with the Firm’s Investment Advisory Agreement with Pershing Advisor Solutions, the Firm agrees to notify Clients in 5 | P a g e Shikiar Asset Management Inc.  advance of any changes in Pershing Advisor Solutions Fees and/or Schedule of Charges (SOC), as long as Pershing Advisor Solutions has given the Firm sufficient notice of said changes. Also, it is important to note that several of the fees noted in the Pershing Advisor Solutions Schedule of Charges (SOC) have been waived for the Firm’s clients (i.e., custodial fees, retirement account fees, wire transfer fees, stock transfers, safekeeping, etc.) 6 | P a g e Shikiar Asset Management Inc.  ITEM 6 PERFORMANCE-BASED FEES AND SIDE-BY-SIDE MANAGEMENT Shikiar Asset Management, Inc. does not charge any performance-based fees (fees based on a share of capital gains on or capital appreciation of the assets of a client). 7 | P a g e Shikiar Asset Management Inc.  ITEM 7 TYPES OF CLIENTS Shikiar Asset Management, Inc. provides portfolio management services to high net worth individuals and families, corporations, investment companies, trusts, foundations, as well as tax- exempt portfolios, including IRA’s, 401K’s, and pension plans. The Firm also provides supervisory financial planning at the request and authorization of two of the Firm’s clients. Our minimum initial account balance requirement is $1 million, unless otherwise negotiated. 8 | P a g e Shikiar Asset Management Inc.  ITEM 8 METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS Shikiar Asset Management offers equity, fixed income, balanced and covered call-writing strategies. Based upon Mr. Stuart Shikiar’s extensive training as an analyst, Shikiar is a research-intensive firm where all investment professionals perform substantial and significant fundamental research. Almost all of Shikiar’s research is conducted in-house, the majority of which is primary research—identifying macro as well as individual company trends by reading annual reports, 10-Ks, 10-Qs, attending investment conferences, listening to company conference/earnings calls, and meeting with corporate managements. The sources of external research include Wall Street investment banking firms and computer data services such as Bloomberg, FactSet and Thompson Reuters. Investing in securities involves risk of loss that clients should be prepared to bear. Equity securities represent an ownership interest, or the right to acquire an ownership interest in a company. Equity securities also include, among other things, preferred stocks. The values of equity securities, such as common stocks and preferred stocks, may decline due to political or world events, general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Equity securities generally have greater price volatility than fixed income securities. A bond could decline in value if the issuer or guarantor of that fixed income security is unable or unwilling, or is perceived (whether by market participants, ratings agencies, pricing services or otherwise) as unable or unwilling, to make timely principal and/or interest payments, or to otherwise honor its obligations. The downgrade of the credit of a security held by an advisor may decrease its value. Fixed income securities are subject to varying degrees of credit risk, which are often reflected in credit ratings. Municipal bonds are subject to the risk that litigation, legislation or other political events, local business or economic conditions, or the bankruptcy of the issuer could have a significant effect on an issuer’s ability to make payments of principal and/or interest. 9 | P a g e Shikiar Asset Management Inc.  ITEM 9 DISCIPLINARY INFORMATION Registered investment advisers are required to disclose all material facts regarding any legal or disciplinary events that would be material to your evaluation of Shikiar Asset Management, Inc. or the integrity of Shikiar Asset Management’s management. Shikiar Asset Management, Inc. has no information applicable to this Item. We have no past or present disciplinary action to report. 10 | P a g e Shikiar Asset Management Inc.  ITEM 10 OTHER FINANCIAL INDUSTRY ACTIVITIES AND AFFILIATIONS Shikiar Asset Management, Inc. has no relationship with, nor is affiliated with, any other company, financial or otherwise. 11 | P a g e Shikiar Asset Management Inc.  ITEM 11 CODE OF ETHICS, PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONS AND PERSONAL TRADING Shikiar Asset Management Inc. has in place a comprehensive Code of Ethics in order to assist the Firm and our Employees in meeting our obligations as a fiduciary as well as conveying the expected standards of conduct the advisor has for its advisory personnel. The Code incorporates the following general principles which all Employees are expected to uphold: • We must, at all times, place the interests of our clients first. • All personal securities transactions must be conducted in a manner consistent with the Code and avoid any actual or potential conflicts of interest or any abuse of an Employee's position of trust and responsibility. Pre-approval is required on all personal transactions, either by the Co-Chief Executive Officer, Stuart Shikiar, the Chief Compliance Officer, Diane McDermott, or another Executive Officer of the Firm. • Employees must not take any inappropriate advantage of their positions at the Firm. • Information concerning the identity of securities and financial circumstances of our clients must be kept confidential. In addition, all non-public client information is maintained in a secure and confidential manner. • The Code also includes provisions relating to the confidentiality of all client information, a prohibition on insider trading, restrictions on the acceptance of significant gifts and the reporting of certain gifts and business entertainment items, and personal securities trading procedures, among other things. Independence in the investment decision-making process must be maintained at all times. • The Firm believes that these general principles not only help us fulfill our fiduciary obligations, but also protect the Firm's reputation and instill in our employees the Firm's commitment to honesty, integrity and professionalism. Employees should understand that these general principles apply to all conduct, whether or not the conduct also is covered by more specific standards or procedures set forth in the Code. Failure to comply with the Code may result in disciplinary action, including termination of employment. Shikiar Asset Management, Inc.’s Code of Ethics covers all Supervised persons and Access Persons, which includes all of the Firm’s personnel. All Shikiar Employees are required to read and acknowledge receipt of the firm's Code of Ethics on an annual basis, or as amended, in order to recognize and accept the terms of the Code and ensure that all advisory and supervised personnel are covered. Shikiar Asset Management, Inc., in appropriate circumstances, consistent with clients’ investment objectives, will recommend to investment advisory clients or prospective clients, the 12 | P a g e Shikiar Asset Management Inc.  purchase or sale of securities in which Shikiar, its clients, directly or indirectly, have a position of interest. Shikiar’s employees are required to follow the Firm’s Code of Ethics. Subject to satisfying this policy and applicable laws, officers, directors and employees of Shikiar may trade for their own accounts in securities which are recommended to and/or purchased for Shikiar’s clients. The Code of Ethics is designed to assure that the personal securities transactions, activities and interests of the employees of Shikiar will not interfere with (i) making decisions in the best interest of advisory clients and (ii) implementing such decisions while, at the same time, allowing employees to invest for their own accounts. Under the Code, certain classes of securities have been designated as exempt transactions, based upon a determination that these would materially not interfere with the best interest of Shikiar’s clients. Employee trading is continually monitored under the Code of Ethics, in order to reasonably prevent conflicts of interest between Shikiar and its clients. Employee accounts may trade in the same securities with client accounts on an aggregated basis when consistent with Shikiar’s obligation of best execution. Shikiar employees will not receive a more favorable same-day average execution price than its clients. Shikiar will retain records of the trade order (specifying each participating account) and its allocation, which will be completed prior to the entry of the aggregated order. Completed orders will be allocated as specified in the initial trade order. Any exceptions to commission rates and/or allocations will be explained on the trade order maintained by the Chief Compliance Officer. Shikiar’s clients or prospective clients may request a copy of the Firm’s Code of Ethics by contacting Diane McDermott at 212/888-6565 or diane@shikiar.com. 13 | P a g e Shikiar Asset Management Inc.  ITEM 12 BEST EXECUTION/BROKERAGE AND SOFT DOLLAR PRACTICES Shikiar Asset Management, Inc. generally has full discretion and authority to make all investment decisions with respect to the types of securities to be bought or sold, the amounts of securities to be bought or sold for a particular account, or the broker-dealer through which securities are bought and sold. Shikiar has no obligation in selecting a broker or dealer to execute a particular transaction or to seek competitive bids or the lowest commission cost to the client, provided that Shikiar determines that the commission rates charged are reasonable in relation to the total quality and reliability of the brokerage, research and custodial service made available to the firm for the benefit of Shikiar clients. Notwithstanding that a particular client’s account may not be the direct or exclusive beneficiary of any such service. Commission rates may vary dependent on a variety of factors, including the size of the order and/or the value of the execution price per share. Shikiar will use commission dollars for the execution of transactions in order to obtain research, brokerage and other products and services. The practice of using commission dollars to pay for both execution and other products and services such as investment research is known as "soft dollars". Section 28(e) of the Securities Exchange Act of 1934, as amended, provides a "safe harbor" for certain types of soft-dollar arrangements. It provides that a person who exercises investment discretion with respect to an account will not be deemed to have acted unlawfully or to have breached a fiduciary duty solely by reason of having caused the account to pay more than the lowest available commission if such person determines in good faith that the amount of the commission is reasonable in relation to the value of the brokerage and research services provided by the executing broker, viewed in terms of either that particular transaction or the person's overall responsibilities with respect to the accounts over which he exercises investment discretion. Shikiar seeks to effect portfolio transactions with brokers on the basis of best execution and in consideration of brokerage and research services (e.g. research ideas, investment strategies, clearance, settlement, and custodial services), financial stability, reputation and efficiency of such broker-dealers. Such services could also include research as to creditworthiness of issuers, and statistical studies, special situations, economic forecasts and general market information and 14 | P a g e Shikiar Asset Management Inc.  portfolio information systems. Examples of brokerage and research services provided to Shikiar include Bloomberg and Thomson Reuters data feeds, access to, data feeds from the NYSE and other exchanges, and research-related software. Shikiar expects that the commission dollars generated by client accounts will be used to obtain brokerage and research services (as described above) that will fall within Section 28 (e) safe harbor. Broker-dealers providing such services may be paid commissions in excess of those that other broker-dealers not providing such services might charge. In many cases, a product or service may serve dual purposes, providing both research and administrative uses. For example, many computer systems provide "mixed-use" functions including accounting, record-keeping, and client reporting as well as research. Where a product obtained with soft dollars has research and non-research uses, the Safe Harbor 1986 Release provides that an adviser should make a reasonable allocation of the cost of the product according to its anticipated uses if it wishes to have all products received for soft dollars within the safe harbor. That component of the product or service that assists in making investment decisions may be paid by the adviser with commission dollars under the safe harbor, while the non- research portions are considered outside of the safe harbor and generally must be paid by the adviser using its own hard dollars unless the adviser has obtained its clients' consent based on full and fair disclosure of its practices. Shikiar's use of its Advent performance software falls under this description of "mixed-use", and hard and soft dollars have been allocated accordingly. Pershing Advisor Solutions ("Pershing") acts as prime broker for Shikiar's accounts and, as such, a substantial majority of trades entered into by Shikiar are executed at Pershing. In addition, where Pershing also acts as qualified custodian to Shikiar’s client assets, Pershing provides clients with confirmations of trading transactions. With respect to client trades in over-the-counter securities, it is Shikiar’s practice to instruct Pershing to execute the transactions through a dealer in those securities other than Pershing. By executing such transactions with securities dealers other than Pershing, Shikiar avoids a situation where Pershing should have to deal with Shikiar as a principal; rather, all the dealings between Shikiar and Pershing are on an agency basis. Shikiar believes that maintaining this agency relationship is important and enables Pershing to avoid having a conflict of interest with Shikiar and its clients. Shikiar may aggregate orders of its clients and employees for securities placed with the same broker on the same day in order to obtain the most efficient and cost effective execution. When aggregate orders are placed, and if an order (aggregated or not) is executed by a particular broker in more than one portion on a given business day, the prices of all securities purchased or sold on such day through such broker as part of such order are averaged. While aggregating and average pricing may result in a different price for a particular trade for an individual client than might otherwise be obtainable, Shikiar believes that aggregating and average pricing results in a more efficient execution at equitable final prices for all accounts than if orders were not aggregated or average priced. Neither aggregating, average pricing nor individual order execution has any effect on the commission rates charged to our clients. Thus, when orders are placed with Pershing, notwithstanding that an order is aggregated, a client will be subject to the same commission that would have applied if the order was not aggregated. When aggregated orders are placed with 15 | P a g e Shikiar Asset Management Inc.  brokers other than Pershing, clients participating in that order will each pay the same commission rate per share, resulting in the same net price per share paid or received for that particular aggregated trade order. Clients may sometimes request that a particular broker-dealer be used to effect transactions in their accounts (or instruct that a particular dollar amount of commissions, or a particular number of trades, be directed to a specific broker-dealer) in recognition of services the client receives from the broker-dealer or from a third party (e.g., performance evaluation services rendered to the client, consulting services). In situations where a client designates that a particular broker-dealer be utilized for transactions in the clients’ account, the client must be advised in writing that there may be a resulting price or execution disadvantage to the client if the designated broker-dealer is used. More specifically, the client should be informed that (i) designated brokerage arrangements may impair the adviser’s ability to obtain best execution; (ii) that the client may not receive efficiencies that are available to other clients who participate in aggregated orders, as explained above; (iii) that orders placed with broker-dealers designated by clients generally will be placed after the Firm first places its orders for clients who have not designated the use of a particular broker-dealer; if applicable; and (iv) the client may not have the benefit of negotiated commission rates. Finally, the Firm should inform the client that the Firm will assume no responsibility for any adverse consequences due to the use of the designated broker-dealer. As mentioned above, instructions of a client designating the use of a particular broker-dealer for a client account must be in writing and must be signed by the client. In addition, the Compliance Officer must approve all directed brokerage instructions and ensure that all directed brokerage instructions and the approval for the arrangement are maintained in a client file. 16 | P a g e Shikiar Asset Management Inc.  ITEM 13 REVIEW OF ACCOUNTS Client accounts will be reviewed by Stuart A. Shikiar (Co-Chief Executive Officer/ Secretary/Treasurer), Samuel M. Shikiar, Co-Chief Executive Officer, and Lockwood T. Sloan, Vice President on a regular basis, but at least weekly. The factors that may trigger a change in the portfolio include, but are not limited to, changes in company fundamentals, personal contact with management, analyses from brokerage firms and key industry analysts, news/press releases, company results which may vary from forecasts/general market conditions/significant changes in general interest rates/inflation and central bank policy/and the personal assessment of the financial consequences of world events derived from general information or such other material as is appropriate under particular circumstances. Clients receive monthly account statements from the custodian of their accounts, which are reviewed by Shikiar. As stated under our Custody Policy, Shikiar has reasonable belief after 'due inquiry' that the qualified custodian for their clients' assets is, in fact, sending monthly statements directly to clients. Shikiar receives duplicate copies of these statements from clients' qualified custodian as well as email alerts for viewing on-line statements. A letter and comprehensive account analysis report is provided to clients on a quarterly basis by Shikiar. In addition, portfolio managers are available to meet with the client whenever requested and will seek to tailor reporting to meet the needs of the client. 17 | P a g e Shikiar Asset Management Inc.  ITEM 14 CLIENT REFERRALS AND OTHER COMPENSATION Shikiar Asset Management, Inc. may enter into certain solicitation/promoter agreements with third-party solicitors/promoters relating to the introduction of investors to Shikiar. In consideration for solicitation/promoter activities which result in persons or entities investing with Shikiar, the Firm intends to compensate the solicitor/promoter by paying to such solicitor/promoter a portion of the fees that Shikiar receives from each investor that has been referred (each, a "Referred Investor"). As of November 4, 2022, such arrangements, if entered into by Shikiar, will be carried out in accordance with the SEC’s Marketing Rule 206(4)-1, formerly the ‘cash solicitation rule” under the now departed Rule 206(4)-3. The investment management fees to be charged to a Referred Investor will not reflect any differential over rates that Shikiar charges to investors not introduced by a solicitor/promoter that are participating in the same investment program as that for such Referred Investor. Shikiar and the Solicitor/Promoter will each sign a “Solicitor’s/Promoter’s Agreement” outlining the specifics as well as the scope of their respective activities in the Agreement, including: • The rate of compensation to the Solicitor/Promoter. The rate is calculated on a portion of the annual management fee paid to Shikiar based on the assets attributable to such Referred Investor’s account. • The Solicitor/Promoter intends to introduce prospective investors to Shikiar. • The Solicitor/Promoter hereby undertakes to perform its solicitation/promotion duties in a manner consistent with the instructions of Shikiar, as well as the provisions of the Marketing Rule 206(4)-1. • At the time of solicitation/promotion, the Solicitor/Promoter shall provide the following disclosures to each prospective investor whom it solicits/promotes on behalf of Shikiar. o In accordance with Marketing Rule 206(4)-1, it will be made known to the prospective client whether or not the Solicitor/Promoter is a client of the investment adviser that he/she is representing, as well as whether the Solicitor/Promoter is being compensated, and precisely how much, for his/her role as a Solicitor/Promoter. If there are any potential conflicts of interest on the part of the Solicitor/Promoter that result from his or her relationship with the investment adviser, or due to the compensation he or she is receiving, this will be prominently disclosed. o Under the new Marketing Rule (206(4)-1, the new solicitor rule states that the Solicitor/Promoter is no longer required to deliver a written disclosure document to the prospective client if an endorsement or testimonial is given orally. o Additionally, the former requirement of obtaining a signed and dated acknowledgement form from the prospective client confirming receipt of such disclosures has been eliminated. • Shikiar has no other compensation arrangements. 18 | P a g e Shikiar Asset Management Inc.  ITEM 15 CUSTODY As a fiduciary, an investment adviser has an obligation to safeguard client assets and protect them from loss or destruction. Rule 206(4)-2 under the Advisers Act (the “Custody Rule”) imposes specific conditions on registered investment advisers who have actual or deemed custody of client assets. The Custody Rule contains a definition of the term ‘custody’ which includes ‘holding, directly or indirectly’, client funds or securities or having any authority to obtain possession of them. Accordingly, the Firm is deemed to have custody of assets, by way of a signed contract between client and Advisor, to obtain clients assets by deducting advisory fees from client accounts. The Firm is also deemed to have custody under the updated ruling of the SEC wherein the Division of Investment Management issued a no-action letter dated February 21, 2017, in response to a letter from the Investment Adviser Association (IAA) asking for clarification and assurances related to Rule 206(4)-2 (Custody Rule) under the Investment Advisers Act of 1940 (Advisers Act). In the no-action letter, the SEC Division of Investment Management does state that an adviser who enters into a SLOA (Standing Letter of Authorization) arrangement with its clients would therefore have custody of client assets and would be required to comply with the Custody Rule. However, ‘notwithstanding this view’, the staff of the Division of Investment Management would not recommend enforcement action to the Commission under Section 206(4), and Rule 206(4)-2 under the Advisers Act against an investment adviser if that adviser does not obtain a surprise examination where it acts pursuant to such an arrangement under the following circumstances 1) Clients provide instructions to the qualified custodian, in writing, including client’s signature, third party’s name/address/account number at a custodian/bank to which the transfer should be directed; 2) Client authorizes the investment adviser, in writing, to direct transfers to the third party either on a specified schedule or from time to time; 3) Client’s qualified custodian performs appropriate verification of the instruction, such as a signature review or other method to verify the client’s authorization, and provides a transfer of funds notice to the client promptly after each transfer; 4) Client has the ability to terminate or change the instruction to the client’s qualified custodian; 5) The investment adviser has no authority or ability to designate or change the identity of the third party, the address or any other information about the third party contained in the client’s instructions. In addition, the qualified custodian requires a new signed standing instruction if information concerning the third party payee is changed, as does Shikiar; 6) The investment adviser maintains records showing that the third party is not a related party of the investment adviser or located at the same address as the investment adviser; and 7) Client’s qualified custodian sends the client, in writing, an initial notice confirming the instruction and an annual notice reconfirming the instructions. Both Shikiar and Pershing Advisor Solutions LLC, 19 | P a g e Shikiar Asset Management Inc.  Shikiar’s qualified custodian, adhere to these tenets. As Shikiar complies with and adheres to the tenets as stated above, Shikiar is not required to conduct surprise examinations. Further, the Custody Rule contains basic conditions designed to safeguard client assets. Shikiar has in place appropriate controls to address these conditions as outlined below, as well as written Policies and Procedures. • Periodic sampling of the accuracy of fee calculations. • Testing of the reasonableness of all fees deducted from client accounts based on the adviser's aggregate assets under management. • The segregating of duties of employees responsible for billing clients, reviewing invoices for accuracy, and reconciling the amount of advisory fees deducted. • Shikiar sends initial and quarterly notices to clients encouraging them to compare account information provided in the Adviser's quarterly statements or other financial reports to that received from the clients' qualified custodian. Adviser’s statements may vary from custodial statements based on accounting procedures, reporting dates, or valuation methodologies of certain securities. • Shikiar has reasonable belief after 'due inquiry' that the qualified custodian for their clients' assets is, in fact, sending monthly statements directly to clients. Adviser receives duplicate copies of these statements from clients' qualified custodian as well as email alerts for viewing on-line statements. • Shikiar’s staff members are clients of Pershing Advisor Solutions (PAS), one of our • clients’ qualified custodians, and receive (PAS) monthly statements. • The Firm has on file the attestation letter from Pershing’s Compliance Department confirming that clients receive account statements on, at least, a quarterly basis. • Shikiar delivers an annual notice to all existing clients offering to send our Custody Policy upon verbal or written request. • Pershing Advisor Solutions LLC (PAS) is the primary qualified physical custodian of Shikiar's client assets, except where clients have designated an alternate qualified custodian of their assets (e.g. banks or another qualified broker/dealer). PAS' parent company is The Bank of New York Mellon Corporation, a leading global asset management and securities services firm. The Bank of New York Mellon ranks among the top large-cap financial services companies in the world and has total assets under custodianship and administration of more than $15 trillion. 20 | P a g e Shikiar Asset Management Inc.  ITEM 16 INVESTMENT DISCRETION Shikiar Asset Management Inc. has the discretion and authority to make all investment decisions on behalf of our clients’ managed accounts with respect to the types of securities to be bought or sold, the amounts of securities to be bought or sold for a particular account, the selection of brokers for execution of transactions, as well as selecting tax lot disposition. In all cases, however, such discretion is exercised in a manner consistent with the stated investment objectives for the particular client account. In order to accept discretionary authority, Shikiar and the client sign an Investment Advisory Agreement, describing such authority. The client receives a copy of the executed agreement for his/her files, while Shikiar retains a copy for the corporate files. 21 | P a g e Shikiar Asset Management Inc.  ITEM 17 VOTING CLIENT SECURITIES Shikiar Asset Management, Inc. will generally not take any action (unless requested to do so by clients at their discretion) with respect to the voting of proxies solicited by or with respect to the issuers of securities in which assets of the Client’s portfolio may be invested from time to time without the consent (either oral or written) of the Client. The client reserves the right to vote on such securities. However, Company proxy statements are reviewed as a research function by Shikiar’s professional staff. Clients may request a copy of the Firm’s policies and procedures regarding proxy voting at any time which are summarized above in the Firm’s Disclosure Statement and that is also offered to clients on an annual basis. 22 | P a g e Shikiar Asset Management Inc.  ITEM 18 FINANCIAL INFORMATION Registered investment advisers are required in this Item to provide you with certain financial information or disclosures about Shikiar Asset Management’s financial condition. Shikiar Asset Management, Inc. has no financial commitment that impairs its ability to meet contractual and fiduciary commitments to clients, and has not been the subject of a bankruptcy proceeding. 23 | P a g e Shikiar Asset Management Inc.  ITEM 19 CYBERSECURITY Shikiar Asset Management, Inc. has in place Cybersecurity Policies to protect against wire transfer fraud, phishing (practice of sending fraudulent emails from supposedly reputable companies to get individuals to reveal personal information) and other related cyber threats: • Written Policies and Procedures • Authentication Solutions: • • • • • Requiring verbal confirmation of the instructions. The Firm will call the client on a phone number that we have on file or have used in the past to verify third-party wires or any suspicious requests. Wires cannot be submitted without a second authorized advisor approval. The Firm utilizes firewalls, spam, antivirus controls provided by our IT Vendor, Krantz Secure Technologies. The Firm also works in conjunction with our qualified custodian and bank custodians, piggy-backing with their security safety measures. Custodians will verify with us first, prior to releasing any funds to third-parties, to be sure we are aware of client requests and can confirm validity. Pershing Advisor Solutions (the Firm’s qualified custodian) also requires ‘verbal attestation’ on first-party wire transfers which the Firm wholly supports. • The Firm also recognizes identify theft (Red Flags), data protection, operational controls and Business Continuity as related to Cybersecurity defense efforts. • Shikiar’s staff is continually alerted and trained as to how to recognize phishing emails and other CyberCrime methods of fraud. • Each Shikiar employee is provided with adequate and continued training regarding the Firm’s Client Non-Public Information Protection Program (Client Privacy Statement). • The Firm utilizes the use of encrypted emails for the transmission of client personal data as the Firm recognizes the critical need to protect client information. Shikiar has enlisted the encryption services of Citrix/Sharefile, one of the leading data security firms with no data breach to date. • Shikiar Asset Management recognizes the need to treat Cybersecurity as a thematic issue rather than a policy to be isolated. • Shikiar maintains CyberInsurance through McCormick & Reinmuth Insurance Agency Inc. (Techrug: $1,000,000 coverage w/$250,000 for computer fraud. 24 | P a g e Shikiar Asset Management Inc.